California Reverses Decision on Veterans' Benefits

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Update: The California State Approving Agency for Veterans Education reversed its decision late Thursday to stop three private Missouri collegesfrom offering full veterans education benefits in the state.

In a letter from CSAAVE notifying Columbia College, Webster University and Park University of their reinstatement, Latanaya Johnson, the assistant deputy secretary of chief postsecondary education, wrote that the U.S. Department of Veteran Affairs had directed state approving agencies nationally to accept the determinations made by other federal and state agencies responsible for approving educational programs. The agency also reinstated six other colleges that were suspended in the last year: Central Michigan University, Central Texas College, Embry-Riddle Aeronautical University Worldwide, Southern Illinois University-Carbondale, University of Maryland University College and Vincennes University. ​

The dispute between several out-of-state colleges and the California agency that determines eligibility to award veterans education aid in the state is intensifying and may signal a larger power struggle between states and the federal government over the authority to regulate and determine the legitimacy of educational programs.

A judge granted a court order last week on behalf of three Missouri-based nonprofit institutions -- Park University, Webster University and Columbia College -- to temporarily block the California State Approving Agency for Veterans Education from suspending their ability to award federal education aid to veterans and service members. CSAAVE determines which colleges are eligible for GI Bill reimbursement in the state. In recent months, six other colleges around the country have also received suspension letters from the agency.

“We found when we looked at these institutions that they’re not operating the way they’re supposed to be operating,” said Latanaya Johnson, education administrator for CSAAVE.

The core dispute is over the interpretation of a provision in federal law that determines whether state approving agencies such as CSAAVE can approve of educational programs that are offered by out-of-state colleges at extension locations within California. At risk for the colleges -- and the veterans they serve -- is a decrease in the monthly or basic housing allowance, which is determined by the location of an institution.

The law says that to receive state approval, a college facility must be designated as a main or branch campus, not an extension site, satellite location or teaching annex, Johnson said. In the case of Columbia, Park and Webster, she said their regional accreditor, the Higher Learning Commission, deemed the three institutions' locations in California to be similar to extension sites and not main or branch campuses. Therefore, the California agency concluded, the locations in California would fall under the Missouri approving agency's jurisdiction and would qualify for the standard housing allowance given to online or distance learning programs.

CSAAVE, which provides oversight for 1,300 institutions, has been evaluating applications colleges send each year to receive the agency’s approval, and it wasn't until last year after discussions with HLC officials that they noticed the discrepancy, Johnson said.

“None of the campuses operate a main or branch campus in this state,” Johnson said, adding that often these facilities are two rented rooms with a school certifying official or a registrar present and a place to offer instruction. “Everything they do here is operationally dependent on something out of state.”

According to the federal code:

Johnson said the only change between these colleges being approved last year by CSAAVE and this year is that the agency is now examining the institutions “as they exist as opposed to what they submitted” in an application.

The suspensions, which affect only new students, mean that students who choose to attend those institutions and qualify for the military benefits would see their funding cut off or reduced.

The largest impact would be felt in monthly housing allowances, which are based on the cost of living in a particular zip code of the college a student is attending. Cities like San Francisco and Los Angeles with high costs of living would have higher housing allowances than the housing allowance given to students enrolled in online or distance learning programs. The online rate is half the national average of monthly allowances, or $825 for this year. Students who take at least one course in person would qualify for the in-residence housing allowance.

“Some institutions will open up in locations where it’s advantageous and [have] a higher basic housing allowance for students,” Johnson said. “So, the student has an incentive to enroll. It boosts school attendance as long as they keep doing it that way.”

Take, for example, a veteran who enrolls in a program based in San Francisco. If that program is located on a branch or main campus and has CSAAVE approval, the student can receive about $4,000 a month in the basic or monthly housing allocation. If the California facility is not a branch or main campus, and doesn't have CSAAVE approval, the student would receive $825 a month.

“We understand that’s a difficult spot for veterans to be in,” said Lindsey Sin, deputy secretary for women veterans' affairs for CalVet. “A service member gets out of the military and wants to pursue their education goals and they’re using the [basic housing allocation] as a source of income and they’ve become dependent on that and that’s understandable. But we also have to comply with the law and ensure schools and institutions are acting as they represent themselves.”

The Colleges’ View

Officials at Park University said CSAAVE is misinterpreting the law and that the agency should approve the colleges regardless of whether they are branches or extensions, because the latter facilities have the capacity to maintain records and accounts and offer programs that lead to a degree.

The Higher Learning Commission does not use the term “extension,” but defines facilities that are not campuses or branches as “additional locations.” An official from HLC sent Inside Higher Ed a list of out-of-state additional locations for the three colleges, which include the California facilities.

“These schools in question have been around forever,” Boylan said. “It’s not a question of whether they produce a good education or not, but whether it is within our authority to approve the programs.”

Disputing Locations

An official from the federal Department of Veterans Affairs said Wednesday that the agency is working with the colleges and CSAAVE to resolve the dispute.

These issues over the status of a location and whether they maintain state-based GI Bill eligibility are not new. A similar dispute emerged in 2015 when for-profit Ashford University shut down its physical campus in Iowa but maintained a separate Iowa-based educational facility. The Iowa state approving agency attempted to strip the university’s GI Bill eligibility. But last year, with assistance from the veterans affairs' agency, the university’s parent company, Bridgepoint Education, received approval from Arizona to award veterans' benefits.

And state approving agencies nationally are seeing challenges to their legal authority to authorize programs. On Thursday, retired Major General Robert Worley II, the director of VA education services, sent an advisory to the state approving agencies urging them to accept the certifications and approval of accreditors, licensing boards and other state or federal entities that oversee educational programs.

“In all instances where an agency or office (either federal, state or nongovernmental) outside of the [state approving agency] has been duly authorized, appointed or designated by state or federal law or regulations as the agency or office responsible for certifying compliance with applicable laws, regulations, or nongovernmental standards, those offices have already expended resources to ensure compliance with the standards,” the advisory said. “It is inefficient and a waste of VA resources for a SAA to repeat their work and expend further resources in an attempt to confirm or overrule their determinations … these agencies and offices are presumed to be the authoritative experts on these requirements, and the same cannot be presumed of the SAA.”